Thursday 17 March 2005 06.22 EST
First published on Thursday 17 March 2005 06.22 EST

Gordon Brown yesterday cheered Labour MPs who welcomed his help for pensioners as a vote winner. But it left open the awkward question of the chancellor's role in the coming election campaign.

"There was something for everyone in it," said Candy Atherton, who added that boosts for pensioners and families were particularly welcome in a low-income area like her constituency, the three-way marginal of Falmouth and Camborne.

"The only way the Tories can have a go at this is to say 'he will have to raise taxes'. But they were going to say that whatever the budget said," said Nigel Beard, defending a majority of less than 1,500 in Bexleyheath and Crawford.

Both are typical of the sort of Labour candidate who has most riding on Mr Brown's statement yesterday. If his package fails to win back voters thinking about a change after seven years of Labour rule, they will be out of a job.

Some MPs were less gushing. One expressed concern that the one-off £200 refund for pensioners was too compli cated and less generous than the Tory offer to cut council tax by up to £500 for pensioners.

Those fears were countered by Labour focus groups which, it was claimed, had showed that the big Tory council tax cut for pensioners had not been seen as credible.

At Number 10, the reaction was delight. Mr Brown had "restored the new Labour coalition" by helping pensioners and young families. But there was also awareness that Mr Brown's role in the election campaign has to be sorted out.

Party officials hope a joint appearance by Mr Brown and Mr Blair this morning will presage a renewed alliance. Number 10 is proposing that Mr Brown and Alan Milburn, the election co-ordinator, need to work together in the same way that Mr Brown and Peter Mandelson, two long-standing personal rivals, cooperated in the previous campaigns. Mr Brown would be offered an election title that satisfied him while Mr Blair would remain election strategy chairman.

The main difference between Mr Blair and Mr Brown during the run-up to the budget was whether to give extra help for hard-working families through tax credits or through taking people out of tax through tax allowances.

It was acknowledged that Mr Brown's choice helped more people at less cost, but was more difficult to sell due to its complexity. It was also claimed that the Treasury agreed to change its initial view and accept raising of the stamp duty threshold from £60,000 to £120,000.

Ministers also responded positively to what they perceived as the chancellor's strategic balance between offering short-term prizes to political target groups and retaining the hard-won reputation for economic competence.

But the high level battle was only of secondary interest to Labour backbenchers, who will be out this weekend selling the budget to voters on the doorstep. MPs from the north and the midlands were especially keen on the stamp duty reform, saying it would have a real impact.

Angela Eagle, MP for Wallasey and a member of the Treasury select committee, said that while the budget had introduced attractive policies, it would be crucial to go out and sell them to the electorate.

"I don't think we've trumpeted tax credits enough. People think they descend like manna from heaven, and it's time we took credit for them: it's a key election area we should be getting across to people," she said.

But she argued the underlying message of the budget - that a Labour government had created "consistently impressive" economic stability and growth - would ultimately be more important than individual policy announcements.

Another broadly loyalist MP said the next campaign will be unlike any other. He still predicted a Labour victory of between 60 and 100 seats but said if the mood was wrong, Tony Blair only had a few months left. "Gordon is circling, and this budget helps him build his support."